Irish deputy PM quits as party leader after poll rout

Eamon Gilmore, Deputy Prime Minister of Ireland, addresses the 68th session of the United Nations General Assembly at UN headquarters in New York, September 28, 2013.

Reuters/Ray Stubblebine

DUBLIN (Reuters) - Irish deputy prime minister Eamon Gilmore on Monday said he will quit as leader of the junior government Labour party, in a move that could destabilise the coalition and its austerity programme following a major election setback.

Eight members of Labour's parliamentary party, representing almost a fifth of the grouping, had submitted a motion of no confidence in Gilmore's leadership after its support collapsed at weekend local and European elections.

"I believe the work in renewing the party is best done under new leadership," Gilmore, who is also the country's foreign minister, told a news conference.

"We will ensure that there isn't going to be an instability in government," he said, adding he would step down once his successor is elected by the party.

Labour went into government for the first time since the late 1990s three years ago on a promise to end the previous administration's adherence to "Frankfurt's Way", an austerity plan the party said was dictated by the European Central Bank. However the centre-left party has angered supporters by pursuing the tough austerity required under an EU/IMF bailout that ended last year and it captured just 7 percent of seats in the local polls, compared with 19 percent at parliamentary elections three years ago.

The party was also on course for a wipeout in an election for the European Parliament as counting continued on Monday. It won three of the 12 seats on offer five years ago.

Ireland has taken almost 30 billion euros or close to 20 percent of gross domestic product out of the economy since 2008 and a further 2 billion euros of cuts are needed to reduce its budget deficit to an EU target of 3 percent of GDP next year.

Prime Minister Enda Kenny, who had a very close relationship with Gilmore and whose party surprisingly slumped to second place in the local polls, needs the support of Labour to push through its final package of austerity cuts in October's budget.

"It will destabilise things, no doubt. A new leader is going to be under pressure to be continuously seen to be fighting. I'd say you'll see more crises in the future if Gilmore goes," Eoin O'Malley, politics lecturer in Dublin City University, said before the announcement.